More on the dollar... It's starting to "correct" downwards:http://www.dailyfx.com/forex/fundame..._08092011.html
Dollar Strength Fragile as Markets Weigh the Fed against Stability
There are many repercussions with downgrading the United States top credit rating; and it seems pretty clear through Mondays price action which concern came out on top. Despite the implications that a downgrade holds for the greenbacks primary fundamental appeal in the FX market, habit is hard to ignore. And, there is no more engrained tendency in the global capital markets than running to US Treasuries during a flight to safety. If we werent in the midst of a global unwinding of risky positioning, the greenback would likely have collapsed further and essentially struggled to perform any near-term safe haven role. Yet, this downgrade comes at a strategically beneficial time for the dollar where leverage was already being unwound at an aggressive pace; and the Standard & Poors downgrade to AA+ read more easily as a crisis point than it did as a dollar consideration. So, what we are left with here; is a market that is prioritizing its many signals not unusual. Yet, this prevailing dollar strength could fail very quickly in the near future depending on which path the markets follow.